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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (58398)	1/4/2002 3:09:27 AM
From: StanX Long	Read Replies (1) \| Respond to of 70976

The Economy: Just Like Last Year? Well, not exactly. But talk of the 2002 recovery is starting to sound awfully familiar BY FRANK PELLEGRINI time.com Wednesday, Jan. 02, 2002 Just three days in, this brand new economic year is already starting to look very familiar. Not that any economic forecasters are penciling in another terrorism tragedy like Sept. 11 — in fact, the possibility of more terrorism at home doesn't really appear in any figurings. But think back to this time last year — in January 2001, the economy was clearly catching at least a vicious winter cold. Manufacturing was contracting. Stocks were sluggish. On Jan. 3 Alan Greenspan picked up the phone and called in an emergency 50-basis-point rate cut to try and nip the gathering contraction in the bud. Economists, analysts and business journalists were agreed that we were in for a sharp slowdown, maybe even a recession. But it would be the briefest of downturns; maybe a quarter or two, tops, with recovery setting in by August. That recovery never came. Sept. 11 did. The lows got violently lower, the pace of layoffs and bankruptcies picked violently up. The recession (which was now back-dated to March) was definitely going to be a painful one, and the recovery from the dot-com bust of 2000 and its spinoff, the telecom bust of 2001, got postponed by a quarter or two. Or maybe more. Because as 2002 gets underway, stocks are sluggish. Manufacturing is contracting. And whereas just last Friday a spate of economic reports — consumer confidence, housing, manufacturing — had investors writing in the recovery in pen, the first trading day of the new year is featuring the beginnings of a pretty stern reality check. Wednesday, analysts downgraded AOL Time Warner (parent company of this writer), actually slapped a "sell" — and a bankruptcy warning — on Kmart, and even pooh-poohed sole Internet survive-and-thriver eBay, just weeks before what everybody expects to be one depressing Q4 earnings announcements. And it's not just the rear-view — few expect the corporate-earnings recession to reverse itself with much drama. The 2002 graph should be slanted up — it'd be hard to slant down after the last year and half — but it looks like it'll be a pretty gentle grade.